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California Lottery to Launch Mega Millions Tomorrow; California Lottery Officials and State Attorney General Stand Firm.

SACRAMENTO, Calif. -- California's entrance into the multi-state MEGA Millions game is legal and tickets will be on sale tomorrow, Wednesday, June 22, said California Lottery officials during a California Senate Governmental Organization Committee Informational Hearing today.

Based on two years of discussions and legal opinions by the State Attorney General, the California Lottery reaffirmed its right to join the multi-state game. The Lottery testified that the State Attorney General had reviewed the game concept, rules and the joint powers agreement and concurred with the Lottery that MEGA Millions can legally be offered in California.

"The Lottery Act is very clear, the California Lottery has the legal right to offer a lotto type game without the approval of the State Legislature," said Chon Gutierrez, Acting Director of the California State Lottery. "The State Attorney General has reviewed the Joint Powers Agreement and has rendered the opinion -- MEGA Millions is legal."

"Lottery players have said over and over that they want this game," Gutierrez said. "Now, we need to get back to launching MEGA Millions tomorrow morning. Californians are waiting to buy tickets, and California education is waiting for its guaranteed 34 percent of all ticket sales in the state."

The Lottery's General Counsel Melissa Meith explained to the committee that the Legislative Counsel had acknowledged that they had not looked at the underlying agreement for MEGA Millions and speculated on how it would work.

According to Meith, the Legislative Counsel's opinion misses the most important fact about the game -- MEGA Millions is a California game and will be run like every other California Lottery game in accordance with the 1984 California Lottery Act, which was voted in by the people of California.

As with all other California Lottery games, 34 percent of the sales of all MEGA Millions tickets sold in the state go to California education; and, all prizes are pari-mutuel, meaning the prize amount increases with the number of tickets sold.

The Lottery and Attorney General's office also stressed before the Legislative Committee that the Joint Powers Agreement with the other 11 states was not a contract with a "private entity" but rather an agreement with a public agency with the common goal of raising money for each state's designated lottery beneficiary.

"The California Lottery is not relinquishing any operational control," continued Meith. The Lottery will oversee and validate each draw as well as review all jackpot prizes. In addition, no California prize funds will be handled by anyone outside of the state.

"The Lottery staff has worked hard over the past two years to ensure that MEGA Millions is in accordance with the California Lottery Act's mandated standards and law," continued Gutierrez. "This same staff has also increased sales to the highest levels ever."

The California Lottery is having its best sales year ever with approximately $3.3 billion in sales projected this fiscal year. These sales levels are $450 million more than projected. Proceeds to California education are expected to top $1.16 billion this fiscal year.

Lottery officials estimate that the addition of the MEGA Millions game could increase overall Lottery revenue significantly over the next few years with a net increase from $300 million to $500 million in the first year. This could translate into increased proceeds to California's classrooms.

For more information log on to www.calottery.com.
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Publication:Business Wire
Date:Jun 21, 2005
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